Brief:

• Chase Bank's Chase Pay customers who use Samsung Galaxy smartphones can now link their mobile wallet to Samsung Pay. Customers are now able to use Samsung Pay's magnetic secure transmission (MST) technology, along with near-field communication (NFC) capabilities, to pay with the Chase Pay app at millions of merchants in the U.S. by tapping the special payment terminal, according to a statement.
• Bringing together the two wallets gives Chase cardholders more ways to pay with their mobile phones and at more places. Samsung Pay is accepted at nearly all payment terminals, making it the most widely accepted mobile payment product in the country, Samsung said.
• Consumers that link the two wallets will also be able to earn both Samsung rewards points and, for eligible Chase cards, Chase Ultimate Rewards points, for purchases. The Chase Pay app's "pay with points" feature also lets customers redeem the bank's reward points at checkout for a statement credit.

Insight:

By linking Chase Pay to Samsung's payment platform, parent company JPMorgan Chase is making it much easier for consumers to use its mobile wallet system. Chase Pay relies on scanning QR codes to complete in-store purchases, making the service less convenient that payment methods that rely on a smartphone's NFC chip or MST to handle a contactless, tap-to-pay transaction. The QR code system was based on CurrentC, a payment platform developed by retailers that sought to take more control over mobile purchases to lower costs and obtain more consumer data, Endgadget reported. CurrentC shut down two years ago as more retailers began to accept Apple Pay, Android Pay and Samsung Pay, and as Walmart introduced its own payment app.

JPMorgan Chase has the most mobile banking customers, which means Samsung Pay now has a chance to reach a broader audience of customers. JPMorgan Chase has 31.6 million active mobile users, ahead of Bank of America (25.3 million), Wells Fargo (22 million) and Citigroup (10 million), per Bank Innovation. That means nearly two-thirds (62%) of JPMorgan Chase customers are using its mobile app, considering that Chase has 51.1 million deposit accounts, per the Federal Deposit Insurance Corp. With incentives like Chase Ultimate and Samsung reward points, users many now be more motivated to use the payment methods.

Although smartphone makers like Samsung, Apple and Google offer mobile payment services, retailers still have an opportunity to encourage customers to use their own branded payment apps. Starbucks, for example, is expected to generate 40% of mobile in-store transactions this year among the 55 million U.S. consumers over the age of 14 who have a smartphone, eMarketer forecast in May.

The researcher predicted that 23.4 million people will use the Starbucks app to make a point-of-sale payment, compared to 22 million for Apple Pay, 11.1 million for Google Pay and 9.9 million for Samsung Pay. Merchant-branded mobile apps are gaining more traction, which means the top four payment apps could see declining market share even as they gain users. The number of U.S. proximity mobile payment users is set to grow 14.5% this year to 55 million, per eMarketer forecasts.